(Adds details on strategy, business performances, CEO comments)
LONDON, May 29 (Reuters) - British water utility Severn Trent reported on Thursday a better than expected 7 percent rise in its underlying pre-tax profit to 269.1 million pounds ($450 million), and forecast a further 5.6 percent rise in the dividend in the year ahead.
Severn Trent reiterated it was paying a dividend of 80.4 pence for the year ended March 31, a 6 percent rise, and forecast a total payout for the current year of 84.9 pence.
The company, whose tariffs are capped by regulator Ofwat, said it will comment on its strategy beyond 2015 only after the regulator has approved its business plan out to 2020, a decision expected by Dec. 12.
Chief Executive Liv Garfield, who joined Severn Trent eight weeks ago from BT, said her focus over the coming 12 months would be trying to secure a good outcome from the regulator’s pricing review and to speed up decision-making within the company.
Severn Trent’s regulated water supply business posted a 4 percent rise in underlying pre-tax profit of 518.6 million pounds, but the firm recorded an impairment of 24.7 million pounds in its services business after what it called a “disappointing” performance.
A year ago Severn Trent rejected a series of takeover offers by LongRiver Partners, an investment fund consortium including Borealis Infrastructure Management, saying they did not reflect the firm’s long-term value.
A new piece of legislation has now made it easier for UK water companies to merge, but Garfield said it was too early to say whether she would decide to make use of the legal changes to make any acquisitions. ($1=0.5986 British pounds) (Reporting by Karolin Schaps; Editing by Greg Mahlich)